Wednesday, October 21, 2009

Gasoline consumption and today's TWIP

So how far has the recovery progressed? Not being one of the many financial gurus that have been peering over the bull’s entrails for the past six months my measure, as you may have noted has been a bit simpler. I have been looking, each month, at the amount of miles driven and the gasoline consumed, as reported in the weekly TWIP, by the EIA. It is not a particularly accurate measure but it does indicate a level of activity that first started reversing the decline last April, and it has been picking up ever since. The current curve, published today, shows a continuing increase in consumption.

U.S. gasoline demand (EIA TWIP)

However it does require a little clarification since the data that the TWIP is plotting (if one goes one layer deeper into the site) appears to be the finished gasoline supplied. However, since this tends to fairly rapidly transfer to the consumer in most cases it remains a simple guide to what may be happening.

So the curve is going up, and so I wondered where we stood relative to the conditions of the economy pre-recession. Going to the tabulated data – conveniently in a spreadsheet – I simply sorted the data by the size of the demand (thousands of barrels a day).
The data for the top weeks of production shows that we peaked (in the short term) in 2007.

Top 20 days of gasoline production/consumption in the United States (EIA)

However, if we look at the second block of 20:

Second top 20 days of gasoline consumption/production in the United States (EIA)

You will notice that in the week of May 22 (number 27) and of August 28 (number 40) 2009 has made it back into the list. This is not the season for high demand, and so, even though the trend is up, the next 2009 entry does not come until number 85, but the fact that the numbers have headed back, and that the difference between the current peak (9,762,000 bd) and the highest this year (9,538,000 bd) is only 224,000 bd might suggest that the public awareness of the OPEC restriction on production – or the relaxation of that quota system – may come a little earlier than we might otherwise have thought. The FHA plot for the month on actual vehicle miles driven for August is not out yet, but the picture for May was showing that, barring the South East, the rest of the nation was starting to drive more than in the same period of 2008.

Change in regional driving habits over 2008 for May of this year (FHA)

It will be interesting to see how the winter turns out, though the use of different fuel sources, the economy and the type of winter we’re going to have are all still in question.

Interestingly the commentary at the start of today’s TWIP dealt with the need for more transparency in the global oil market, noting that information on inventories is the most opaque. Since this is the buffer between production and consumption and the growth of “floating storage” – an even more opaque value – means that the real trends in production can be masked and even more difficult to predict.


  1. The August plots for vehicle-miles driven are out. They show a continued uptick in the 12-month moving average but little difference between Aug 08 and Aug 09. I think the September and October plots will be more diagnostic of recovery.

    Sorry for the absence of a link; I've misplaced my ability to paste here again.

  2. Thanks, I'll probably wait until next week to put it up - since I can then tie it to the next TWIP